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The meaning of historical cost
Historical cost, also known as accounting cost, refers to all the costs actually incurred by enterprises in the course of operation. Including wages, interest, land and housing rent, raw material expenses, depreciation, etc.

The core is the record of accounting elements, and economic business should be measured and priced according to the acquisition cost. ?

According to this measurement requirement of accounting elements, the acquisition, consumption and conversion of assets should be measured and recorded according to the actual expenditure when acquiring assets; The acquisition and repayment of liabilities are measured, priced and recorded according to the actual expenditure of acquiring liabilities. Assets minus liabilities V. Owners' equity is naturally priced at historical cost, which is different from replacement value, realized value and market price on the reporting date.

The calculation formula is: accounting cost = account expenditure = consumed+not consumed.

In which: unconsumed = assets, consumed = generated income (expense)+unproduced income (loss).

Accounting cost is an objective and tangible expenditure recorded in the company's account books, including raw materials, power, wages, rent, advertising, interest and other expenses in the process of production and sales. According to China's financial system, the total cost consists of production cost, management cost, financial cost and sales cost.

Production cost refers to all production expenses incurred by production units for producing products or providing services, including all direct expenses and manufacturing expenses. Direct costs include direct materials (raw materials, auxiliary materials, spare parts, fuel and power, etc. ), direct wages (wages and subsidies for production personnel) and other direct expenses (such as welfare expenses).

Manufacturing expenses refer to the expenses incurred by branches and workshops in an enterprise for organizing and managing production, including salaries, depreciation expenses, maintenance expenses, repair expenses and other manufacturing expenses (office expenses, travel expenses, labor insurance expenses, etc.). ).

Management expenses refer to the expenses incurred by the administrative department of an enterprise for management and organization. Including salary and welfare expenses of managers, first-class depreciation expenses of the company, repair expenses, technology transfer expenses, amortization expenses of intangible assets and deferred assets and other management expenses (office expenses, travel expenses, labor insurance expenses, land use tax, etc.). ).

Financial expenses refer to various expenses incurred for raising funds, including net interest expenses and financial expenses (net exchange loss, bank charges, etc.). ) occurred in the process of production and operation.

Sales expenses refer to various expenses incurred for selling products and providing services, including salaries of sales department personnel, employee welfare expenses, transportation expenses and other sales expenses (advertising expenses, office expenses and travel expenses). Management expenses, financial expenses and sales expenses are called period expenses and are directly included in the current profit and loss.

Extended data

Accounting cost is an explicit cost, which can be measured in money and reflected in accounting accounts. In addition to accounting costs, there is also a hidden cost. It is very different from explicit cost, that is, accounting cost. Hidden costs cannot be directly reflected in the books, so it is difficult to measure them accurately. For example, opportunity cost belongs to hidden cost.

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